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US new jobless claims at 4-year low

Thu, Feb 16, 2012, 00:00

New US claims for unemployment benefits unexpectedly fell last week to a near four-year low, a government report showed today, suggesting the labour market was finally strengthening.

Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said, the lowest since March 2008. The prior week's figure was revised up to 361,000 from the previously reported 358,000.

Economists polled by Reuters had forecast claims rising to 365,000. The four-week moving average for new claims, seen as a better measure of labour market trends, fell 1,750 to 365,250 - the lowest since April 2008.

Last week's drop pushed claims below the 350,000 level that economists normally associate with sustained strength in the labor market. New jobless claims have declined for three straight weeks.

Job gains have exceeded 200,000 for two straight months and the unemployment rate dropped to a three-year low of 8.3 per cent in January.

But considerable slack still remains, with 23.8 million Americans either out of work or underemployed. There are no job openings for nearly three out of every four unemployed.

A Labor Department official said there was nothing unusual in the state-level data and no state had been estimated.

The number of people still receiving benefits under regular state programs after an initial week of aid tumbled 100,000 to 3.43 million in the week ended February 4th. That was the lowest level since August 2008.

Economists had forecast so-called continuing claims falling to 3.50 million from a previously reported 3.52 million.

The number of Americans on emergency unemployment benefits rose 16,568 to 3.00 million in the week ended Jan. 28, the latest week for which data is available.

A total of 7.68 million people were claiming unemployment benefits during that period under all programs, up 18,304 from the prior week

In a separate report, US producer prices outside food and energy recorded their largest increase in six months in January.

The Labor Department said its seasonally adjusted core producer price index rose 0.4 per cent last month, the largest gain since July, after increasing 0.3 per cent in December.

Economists polled by Reuters had expected core PPI to rise only 0.2 per cent. In the 12 months to January, core producer prices rose 3.0 after increasing 2.7 per cent in December.

But overall prices received by farms, factories and refineries edged up 0.1 per cent after dipping 0.1 percent in December.

The rise, which was smaller economists' expectations for a 0.4 per cent gain, reflected declines in food and energy prices.

In the 12 months to January, producer prices increased 4.1 per cent, moderating from 4.8 per cent December. That was the smallest increase in a year.

Wholesale prices outside of food and energy were pushed up by a drugs costs, which accounted for about 40 per cent of the increase. Higher prices for light motor trucks and household appliances also contributed.